What’s the minimum salary to get a loan for the 2020 Mitsubishi Xpander?

Eric · Nov 20, 2020 09:00 AM

Mitsubishi Motors Malaysia recently released the prices of the 2020 Mitsubishi Xpander, a model that will compete directly against the Honda BR-V, Perodua Aruz, and Toyota Rush.

In this article, we will take a closer look and see how much you need to make each month before you should apply for a loan to purchase the Mitsubishi Xpander.

How much do I need to make?

The Mitsubishi Xpander has a starting price of RM 91,358 (on the road, without insurance), meaning that the monthly repayment is roughly RM 920 a month, factoring in a 2.27 percent interest rate with a 9-year loan.

Following the recommended guideline that you should not be paying more than 20 percent of your monthly salary for your car’s repayment, you’ll need to bring home a net salary of at least RM 4,600 a month.

With the cost of insurance, maintenance, tyres, and other associated running costs factored in, your car-related expenses should not exceed 30 percent of your monthly salary.

That said, interest rates are always changing. Given our current situation, interest rates are very low, but you will still need to check with your respective banks for the latest rates. On top of that, the prices we quoted here are only valid until 31-December 2020, as it includes the Government’s Penjana sales tax exemption incentive.

Don't take the 9-year loan option

It doesn’t take a financial specialist to tell you this: Don’t take the 9-year loan option.

It’s a much wiser choice to opt for the shorter 5-year loan tenure.

For comparison, if you opt for a 5-year tenure for the Mitsubishi Xpander, the monthly repayment is roughly RM 1,520. That figure is a tad bit more than the 9-year tenure, but there are benefits, as explained below.

Part of the reason why 9-year loans are not recommended, it’s because of interests. If you went for the 9-year loan option, you’ll be forking out almost RM 17,000 in interests alone. However, if you opted for the shorter 5-year tenure, the interest amount comes down to roughly RM 9,300.

5-year loan tenure monthly repayment
Variant Price (RM) Monthly repayment (RM)
Xpander 1.5 91,358 1,520


7-year loan tenure monthly repayment
Variant Price (RM) Monthly repayment (RM)
Xpander 1.5 91,358 1,130


9-year loan tenure monthly repayment
Variant Price (RM) Monthly repayment (RM)
Xpander 1.5 91,358 920

The problem with 9-year loans is that the tenure is so long, the value of your car is depreciating faster than your ability to pay off the loan.

You could also end up in a situation where if for whatever reason, you are forced to sell the car or claim total loss from your insurance, you will have to top up more money before you can settle your loan because the outstanding balance is more than your car's market value.

So keep that in mind before signing for a 9-year loan.